When you invest your money, the goal generally is for your investments to provide you a “positive return” – in other words, a profit on your investment. It stands to reason, therefore, that the more money you can make on an investment can make an investment more attractive.
This is precisely what many Ponzi (or “pyramid”) schemers rely upon: investors’ desire for investment returns that are significantly greater than those provided by traditional investments vehicles.
Generally speaking, ponzi schemes and scams invest little to none of your money in the purported investment. Instead, your money is used to pay the promised exorbitant “investment returns” to earlier investors. These payments fool early investors into believing the false promises of high returns with little risk. Investors then pump even more money into the scam after receiving these so-called investment returns. They also often convince others to invest in the scam. This may continue as long as people continue investing in the operation – years, or even decades, in some cases – which provides a continuing flow of new investor money that the fraudsters can use to pay “investment returns” to earlier investors.
If you are approached with an investment opportunity that seems too good to be true, it probably is. Be on the lookout for the following before investing: extremely high rates of return promised, especially from unregistered investments or unlicensed brokers; very complicated investment strategies, failure to provide the proper paperwork; and last but not least – difficulty receiving payments when asked.
Call a Los Angeles Ponzi Attorney Today
If you believe you have the victim of a Ponzi scheme, you are certainly not alone, and you may have certain legal rights that require your immediate attention.
Contact an experienced Los Angeles stock fraud attorney today for a consultation to discuss your rights and options.